Exhibit 10.1


 


EMPLOYMENT AGREEMENT


 


This
Employment Agreement (“Agreement”) is made and entered into by and between
Analysts International Corporation, 3601 W. 76th Street,
Minneapolis, Minnesota 55435 (“AIC” or the “Company”) and Andrew K. Borgstrom,
5562 Linden Avenue, La Grange Highlands, Illinois
60525 (“Executive”).


 


RECITALS


 


The
Company desires to retain the Executive and the Executive desires to accept employment
with the Company under the terms and provisions set forth below.


 


NOW,
THEREFORE, in consideration of the mutual promises and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive hereby
agree as follows


 


AGREEMENT


 


1.                                       Term. The Term of this Agreement
shall commence on the date on which it is last signed by Company or Executive
and shall continue through March 31, 2011 (the “Initial Period”). It shall
be extended for one additional year thereafter (the “Renewal Period”), at the option
of the Company, provided the Company provides notice to Executive of the
renewal at least ninety (90) days prior to the expiration of the Initial
Period. Thereafter, the Agreement shall be automatically self-renewing for
additional one year Renewal Periods unless either party provides the other with
notice of non-renewal at least ninety (90) days prior to the expiration of the
current term. The Initial Period and any Renewal Period(s) are herein referred
to collectively as the “Employment Period.” Notwithstanding anything to the
contrary contained herein, the Employment Period is subject to termination
pursuant to Section 7.


 


2.                                       Employment; Best Efforts. The Company
agrees to employ and engage the services of Executive during the Employment
Period as President and Chief Executive Officer of the Company, reporting to
the Board of Directors, and the Executive agrees to serve the Company in such
capacity, on a full-time basis subject to his ongoing work as Chair of
RapiDemand Corp., during the Employment Period of this Agreement.  In that capacity, and without limitation,
Executive shall perform such duties and responsibilities on behalf of the
Company as are customary of the chief executive officer of a publicly traded
company of similar size and operations, to a level consistent with the highest
standards of one holding such position in similar businesses or enterprises and
agrees not to render services to anyone other than the Company (or its parent
or subsidiaries) for compensation as an employee, consultant, or otherwise during
the term of this Agreement, except as provided in this Section 2, in Section 3
below or with prior consent of the Board of Directors. Executive shall perform
faithfully the responsibilities assigned to him in accordance with this Agreement.


 


3.                                       Personal Activities; Boards of Directors. The provisions of Section 2
of this Agreement will not be deemed to prohibit Executive from devoting
reasonable time to personal matters, or from serving as Chair of RapiDemand Corp., with or without compensation,
provided that such activities do not interfere with Executive’s primary duties
to the Company, present a conflict with the interests of the Company or violate
the Board’s policies communicated to Executive relating to service as a board
member to publicly held companies or codes of conduct for its employees. After
the date of this Agreement, Executive will accept a new appointment or election
to the board of another company only with the prior consent of the Company’s
Board of 


 





















 


Directors.


 


4.                                       Location. Executive will provide his
services in the Minneapolis, Minnesota area. Notwithstanding the foregoing, the
parties recognize and acknowledge that Executive may be required to spend
considerable business time in locations other than the Minneapolis, Minnesota
area.  AIC will lease an apartment for
Executive in or around Edina, Minnesota (not to exceed a monthly rental of
$1,600.00) and will either lease a car for Executive (not to exceed a monthly
lease cost of $440.00) or reimburse Executive for car expense up to $440 per
month.  AIC will also reimburse Executive
for reasonable airfare for travel between Chicago and Minneapolis (not to
exceed four round-trips a month). Reimbursements will be made in accordance
with Company policies, but in no event later than December 31 of the
calendar year after the year in which the expense was incurred.  Reimbursements in one year will not affect
the expenses available for reimbursement in any subsequent year.  The right to reimbursement is not subject to
liquidation or exchange for any other benefit.


 


5.                                       Compensation and other Employment Terms.


 


5.1.                              Base
Salary. During the Employment
Period, the Company shall pay Executive an annualized base salary of
$390,000.00 (“Base Salary”).  The Base
Salary shall be payable in cash, subject to applicable withholdings, in
accordance with the then-current payment policies of the Company for its executives.


 


5.2.                              Incentive
Compensation Bonus. As further
compensation, Executive will be eligible to earn an annual bonus in such amount
as the Board of Directors, in its sole discretion, shall determine; provided, however, that if AIC attains profitability (i.e., achieves net income as reflected in its quarterly
statements of operations) during at least two consecutive quarters in fiscal
year 2010, Executive shall be paid a bonus for fiscal year 2010 of not less
than $100,000. No bonus shall be payable for services performed in 2010 if AIC
does not attain profitability during at least two consecutive quarters in
fiscal year 2010. Any bonus earned shall be payable in cash, subject to
applicable withholdings, within 30 days of the Company’s filing of its Form 10-K
for fiscal year 2010 (or, in the event that payment is not made by March 15,
no later than December 31 of such calendar year).


 


5.3.                              Stock Options.
Simultaneously with executing this Agreement, AIC is also granting Executive
750,000 stock options as set forth in the Incentive Stock Option Agreement
attached hereto as Exhibit A.


 


5.4.                              Fringe Benefits. The Company
will also provide Executive the following:


 


5.4.1.                     Medical Insurance Costs.  The
Company will pay the full cost for family health insurance coverage, including
co-pays and deductibles, if any, for Executive, comparable to that provided to
other senior executives of the Company.


 


5.4.2                        Paid Time Off. Executive
shall be entitled to paid time off at his discretion and as business conditions
warrant. If necessary due to business conditions of the Company, Executive
agrees to obtain concurrence from the Chairman of the Board prior to taking paid time
off of more than five (5) consecutive business days.


 


5.4.3.                     Paid Parking.  The Company will provide Executive with a
paid 


 


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indoor, underground parking
spot, if available from the building, at the Company’s office building
presently located at 3601 West 76th Street, Minneapolis, Minnesota 55435.


 


5.4.4.                     Business
Expenses. Executive will be entitled to reimbursement of all
reasonable, business-related travel and other expenses incurred by Executive in
the ordinary course of business on behalf of the Company, so long as such expenses
are incurred, documented and authorized pursuant to the Company’s expense reimbursement
policies. Reimbursements
will be made in accordance with Company policies, but in no event later than December 31
of the calendar year after the year in which the expense was incurred.  Reimbursements in one year will not affect
the expenses available for reimbursement in any subsequent year.  The right to reimbursement is not subject to
liquidation or exchange for any other benefit.


 


6.                                       Insurance
Policies.


 


The Company will keep all Directors and Officers insurance policies
current and will identify Executive, if appropriate, on all such policies


 


7.                                       Termination.


 


7.1.                              Death. This Agreement shall terminate automatically upon the Executive’s
death. All compensation then accrued hereunder shall be paid to the Executive’s
beneficiaries, representatives or heirs, as appropriate.


 


7.2.                              Disability. If, as a result of the Executive’s incapacity due to physical or
mental illness, the Executive (a) shall have been absent from the full-time
performance of his duties with the Company for three consecutive months, and (b) shall
not, within 30 days after written notice of disability termination is given to
the Executive, have returned to the full-time performance of his duties, the
Company may terminate the Executive’s employment for disability. During such
period of absence, the Executive shall continue in employment and receiving the
benefits provided in Section 5 hereof, and thereafter the Executive’s
benefits shall be determined under any applicable disability insurance plan or
policy that may then be in effect.


 


7.3.                              Cause. The Company may terminate the Executive’s employment for Cause. For
purposes of this Agreement, “Cause” shall mean (A) any act of dishonesty
or knowing and willful breach of fiduciary duty on the Executive’s part which
is intended to result in his personal enrichment at the expense of the Company;
(B) commission of a felony involving dishonest or unethical conduct that a
reasonable person would consider damaging to the reputation of the Company, or (C) refusal
to comply with the reasonable directions of the Company’s Board of Directors.
If the Executive’s employment is terminated for Cause, the Company shall pay
the Executive his full accrued Base Salary through the date of termination at
the rate in effect at the time of such termination, and the Company shall have
no further obligation to the Executive under this Agreement. Any unpaid
incentive compensation or performance bonus shall be forfeited if the Executive
is terminated for Cause.


 


7.4.                              Termination
by the Company or Executive Other than for Cause. This Agreement
may be terminated by AIC or Borgstrom at any time without cause with ninety 


 


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(90) days advance written notice to the other party. In the event AIC
terminates this Agreement without cause, AIC may provide payments due in lieu
of notice and no severance shall be payable.


 


7.5.                              Mutual Agreement. This
Agreement may also be terminated by mutual agreement of the parties.


 


8.                                       Intellectual
Property Rights.


 


8.1.                              Non-infringement.  Executive agrees that all work products
created or produced by Executive during the course of his employment with the
Company will be Executive’s original work
and will not infringe upon or violate any patent, copyright, trade secret,
contractual or other proprietary right of any third party.


 


8.2.                              Disclosure. 
Executive agrees to disclose and describe to the Company, on a timely
basis, all works of authorship, inventions and all other intellectual property
that Executive may solely or jointly discover, conceive, create, develop,
produce or reduce to practice while employed by the Company (“Company
Inventions”).


 


8.3.                              Assignment. 
Executive hereby assigns and agrees to assign to the Company, or its
designee, Executive’s entire right, title, and interest in and to all Company
Inventions. Executive represents that the Company’s rights in all such Company
Inventions will be free and clear of any encumbrances, liens, claims,
judgments, causes of action or other legal rights or impediments.


 


8.4.                              Independent Development. 
NOTICE: Pursuant to Minnesota Statutes § 181.78, Executive is hereby
notified that the foregoing agreement does not apply to an invention for which
no equipment, supplies, facility or trade secret information of the Company was
used and which was developed entirely on the employee’s own time, and (1) which
does not relate (a) directly to the business of the Company (or a Client)
or (b) to the Company’s (or its Client’s) actual or demonstrably anticipated
research or development, or (2) which does not result from any work
performed by the employee for the Company or its Clients.  For purposes of this Section 10.4, the
term “Client” shall have the same meaning as set forth in Section 12.2 of
this Agreement.


 


8.5.                              Works for Hire.  Executive acknowledges and agrees that all
original works of authorship which are made by Executive (solely or jointly
with others) within the scope of his employment and which are protectable by
copyrights, are “works made for hire” as that term is defined in the United
States Copyright Act (17 U.S.C. § 101) and that, as such, all rights comprising
copyright under the United States Copyright laws will vest solely and
exclusively in his employer, the Company. 
Executive hereby irrevocably and unconditionally waives all so-called
moral rights that may vest in Executive (whether before, on or after the date
hereof) in connection with Executive’s authorship of any copyright works in the
course of his employment with the Company, wherever in the world enforceable,
including without limitation the right to be identified as the author of any
such works and the right of integrity (i.e., not to
have any such works subjected to derogatory treatment), and Executive agrees
never to assert any such moral rights with respect to any Company Invention.


 


8.6.                              Enforcement; Cooperation.  Executive agrees to perform, during and after
his employment, all acts reasonably deemed necessary or desirable by the
Company to 


 


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permit and assist it, at its
expense, in obtaining and enforcing the full benefits, enjoyment, rights and title
throughout the world in the Company Inventions hereby assigned to the
Company.  Such acts may include, but are
not limited to, execution of documents and assistance or cooperation in the
registration and enforcement of applicable patents, copyrights, maskworks or
other legal proceedings.


 


8.7.                              Attorney in Fact.  In the event that the Company is unable for
any reason, whether during or after Executive’s employment by the Company, to
secure Executive’s signature to any document required to apply for or execute
any patent, design rights, registered designs, trademarks, copyright, maskwork
or other applications with respect to any Company Inventions (including
improvements, renewals, extensions, continuations, divisions or continuations
in part thereof), Executive hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as Executive’s agents and
attorneys-in-fact to act for and on his behalf and instead of Executive, to
execute and file any such application and to do all other lawfully permitted
acts to further the prosecution and issuance of patents, copyrights, maskworks
or other rights thereon with the same legal force and effect as if executed by
Executive.


 


9.                                       Confidentiality.


 


9.1.                              Confidential Nature of Relationship.  Executive acknowledges that his employment by
the Company creates a relationship of confidence and trust with respect to
Confidential Information (as hereinafter defined).  During the course of his employment with the
Company, the Company agrees to provide Executive with access to Confidential
Information.  Executive expressly
undertakes to retain in strict confidence all Confidential Information
transmitted or disclosed to Executive by the Company or the Company’s clients,
and will never make any use of such information except as (and then, only to
the extent) required to perform Executive’s employment duties for the
Company.  Executive will take such
protective measures as may be reasonably necessary to preserve the secrecy and
interest of the Company in the Confidential Information.  If Executive becomes aware of any unauthorized
use or disclosure of Confidential Information by any person or entity,
Executive will promptly and fully advise the Company of all facts known to
Executive concerning such unauthorized use or disclosure.


 


9.2.                              Definition.  “Confidential
Information” means all confidential or proprietary information and data, in
their broadest context, originated by, on behalf of the Company or its clients
and within the knowledge or possession of the Company (including any
subsidiary, division or legal affiliate thereof).  Without in any way limiting the foregoing,
Confidential Information includes, but is not limited to: information that has
been designated as proprietary and/or confidential; information constituting
trade secrets; information of a confidential nature that, by the nature of the
circumstances surrounding the disclosure, should in good faith be treated as
proprietary and/or confidential; and Company Inventions. Confidential Information
also includes information of a confidential nature relating to the Company’s
clients, prospective clients, strategic business relationships, products,
services, suppliers, personnel, pricing, recruiting strategies, job candidate
information, employee information, sales strategies, technology, methods,
processes, research, development, systems, techniques, finances, accounting,
purchasing and business plans.


 


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9.3.                              Exclusions. 
Confidential Information does not include information which: (A) is
generic; (B) is or becomes part of the public domain through no act or
omission of Executive; (C) was in Executive’s possession prior to the
disclosure and was not obtained by Executive in breach, either directly or
indirectly, of any obligation to the Company or any client of the Company’s; (D) is
disclosed to Executive by a third party without restriction on disclosure; or (E) is
independently developed by Executive using his own resources, entirely on his own
time, and without the use of any Confidential Information.


 


9.4.                              Protected Health Information.  If during the course of his employment with
the Company, Executive receives any “protected health information” regarding
any individual other than Executive, as that term is defined in 45 CFR, Part 164,
Subpart E (“Privacy of Individually Identifiable Health Information”): (A) Executive
agrees to maintain all such information in strict confidence in accordance with
the requirements of the Health Insurance Portability and Accountability Act of
1996 (HIPAA); (B) Executive agrees that he will make no use whatsoever of
any such information except as required to perform Executive’s employment
duties; and (C) Executive agrees that he will never record, store, file or
otherwise maintain, in any computer or other storage device owned by the
Company or by Executive, any “protected health information” other than in accordance
with Company policy. Executive agrees to alert the Company promptly if he becomes
aware of any misuse or unauthorized disclosure of any such information.


 


9.5.                              Additional Confidentiality Agreements.  Executive agrees to execute such additional
non-disclosure and confidentiality agreements as the Company’s clients may from
time to time request the Company to have its key employees execute in order for
the Company to conduct business with its clients.


 


10.                                 Use of
Confidential or Material Non-Public Information; Codes of Conduct.


 


10.1.                        Confidential or Material, Non-Public Information.  Executive acknowledges that he is prohibited
from using or sharing any Confidential Information for personal gain or
advantage (in securities transactions or otherwise), or for the personal gain
or advantage of anyone with whom Executive improperly shares such information.  Specifically as to material, non-public
information of the Company, Executive agrees to comply during the Employment
Period with the Company’s insider trading policy in effect at the commencement
of employment and as amended from time to time.


 


10.2.                        Codes of Conduct.  Executive agrees to carefully review, sign
and fully comply with any Code of Conduct (or similar policy) of the Company
either having general applicability to its employees or specifically to Executive.


 


11.                                 Restrictions
against Solicitation;
Non-Interference.


 


During
his employment by the Company and for a period of eighteen (18) months after termination of such
employment for any reason, Executive agrees that he will not engage in the
following conduct.


 


11.1.                        Restrictions against Solicitation.  Executive
will not, directly or indirectly, initiate any solicitation or recruitment
effort for the purpose of attempting to hire any employee of the Company or to
induce any employee of the Company to leave his employment with the Company
other than through general solicitation or advertisement not directed at
Company employees.


 


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11.2.                        Non-interference.  Executive will not, directly or indirectly,
intentionally disrupt, damage, impair, impede or interfere with the contractual
relationship between the Company and any of its clients.


 


12.                                 Restrictions
Against Competition.


 


12.1.                        Restricted Period.  During his employment by the Company and for
a period of eighteen (18)
months after termination of such employment for any reason, Executive agrees
not to engage in any Competitive Acts with any
Client or prospective Client of the Company within the prior 12 months prior to termination of
Executive’s employment.


 


12.2.                        Definitions.  For purposes of this Section 12, the following terms shall be defined as
follows.


 


“Competitive Acts” means soliciting, selling,
marketing, brokering, providing or managing any services of the sort that the
Company provides to its Clients (“Services”) for any Client, whether directly
as an employee of a Client or indirectly as an employee, subcontractor, partner
or owner of a Competitor.


 


“Client” means: (A) any Company client
for whom Executive provided Services at any time during the previous two years
of Executive’s employment with the Company; or (B) any Company client or
prospective client to whom Executive solicited, proposed, marketed or sold
Services at any time during the previous two years of Executive’s employment
with the Company; (C) any third party having a written partnership,
alliance or teaming agreement or similar strategic business relationship with
the Company, for whom Executive provided Services at any time during the
previous two years of Executive’s employment with the Company.


 


“Competitor”
means any third party offering technical consulting services within the United
States that compete with the Company or are similar in kind or nature to the
services provided by the Company while Executive is employed by the Company.


 


13.                                 Reasonableness
of Restrictions;
Representations of Executive; Extension of Restrictions; Enforcement.


 


13.1.                        Reasonableness of Restrictions.  Executive acknowledges that the restrictions
set forth in this Agreement are reasonable in terms of both the Company’s need
to protect its legitimate business interests and Executive’s ability to pursue
alternative employment opportunities in the event his employment with the Company
terminates.


 


13.2.                        Representations of Executive.  Executive represents that his performance of
all the terms of this Employment Agreement and his performance as an employee
of the Company does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by Executive prior to his
employment with the Company.  Executive
will not disclose to the Company, or induce the Company to use, any
confidential or proprietary information or material belonging to any previous
employer of Executive or others. 
Executive is not a party to any other agreement that would interfere
with his full compliance with this Executive Agreement.  Executive agrees not to enter into any
agreement, whether written or oral, in conflict with the provisions of this
Agreement.


 


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13.3.                        Extension of Restrictions.  The period of all restrictions under this
Agreement will automatically be extended by a period equal in length to any
period in which Executive violates his obligations under this Agreement.


 


13.4.                        Enforcement.  In addition to any other relief or remedies
afforded by law or in equity, if Executive breaches Sections 11 or 12 of this
Agreement, Executive agrees that the Company shall be entitled, as a matter of
right, to injunctive relief in any court of competent jurisdiction.  Executive recognizes and hereby admits that
irreparable damage will result to the Company if he violates or threatens to
violate the terms of Section 11 or 12 of this Agreement.  This Section 13.4 shall not preclude the
granting of any other appropriate relief including, without limitation, money
damages against Executive for breach of Section 11 or 12 of this Agreement.


 


14.                                 Return of
Property.


 


Upon
any termination of his employment with the Company, Executive agrees to
promptly return to the Company: (A) all materials of any kind in Executive’s
possession (or under Executive’s control) incorporating Confidential
Information or otherwise relating to the Company’s business (including but not
limited to all such materials and/or information stored on any computer or
other storage device owned or used by Executive); and (B) all Company property
in Executive’s possession, including (but not limited to) computers, cellular
telephones, pagers, credit cards, keys, records, files, manuals, books, forms,
documents, letters, memoranda, data, tables, photographs, video tapes, audio
tapes, computer disks and other computer storage media, all materials that
include trade secrets, and all copies, summaries or notes of any of the foregoing.


 


15.                                 Assignment.


 


This
Agreement sets forth personal obligations of Executive, which may not be transferred
or assigned by Executive.  The Company
may assign this Agreement to any successor to substantially all of its assets
or business, or affiliates of any such successor, upon delivery to Executive of
a guaranty by the Company of fulfillment of the Company’s obligations to the
Executive hereunder that is reasonably acceptable to the Executive.


 


16.                                 Non-Disparagement.


 


Executive
agrees not to engage in any form of conduct or make any statements or representations
to current or prospective customers of the
Company, media outlets, employees or management of a corporation or business in
direct competition with the Company, or otherwise publish statements or
representations to the public at large which may be actionable, that
disparage, characterize in demeaning manner or question the Company’s business practices,
products, advice, quality of employees and staff, or otherwise harm the public
reputation or good will of the Company, its employees, or management.


 


The
Company agrees not to engage in any form of conduct or make any statements or
representations to current or
prospective customers of Executive, media outlets, employees or management of a corporation or business
in direct competition with Executive, or otherwise publish statements or
representations to the public at large which may be actionable, that
disparage, characterize in demeaning manner or question the Executive’s business practices,
products, advice, quality of employees and staff, or otherwise harm the public
reputation or good will of the Executive, his employees, or management.


 


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17.                                 Indemnity;
Cooperation in Legal Actions.


 


17.1.                        Indemnity.  The
Company will indemnify Executive against any claims arising from or related to
his good faith performance of his duties and obligations hereunder to the
fullest extent allowed by Company By-laws and Minnesota law.


 


17.2.                        Cooperation in
Legal Actions.  In
connection with any action or proceeding against Executive, whether pending or
threatened, for which the Company is obliged to indemnify Executive, the
Company will pay or reimburse Executive in advance of the final disposition for
reasonable expenses, including reasonable attorneys’ fees, necessarily incurred
by Executive.  Executive will cooperate
fully with the Company, at no expense to Executive, in the defense of any
action, suit, claim, or proceeding commenced or threatened against the Company
in conjunction with any action, suit, claim or proceeding commenced or
threatened against him.  In addition to
the foregoing, Executive further agrees to provide assistance to the Company,
at the Company’s expense, as may be reasonably requested by the Company or its
attorneys in connection with the litigation of any action, suit, claim, or
proceeding involving the Company, whether not pending or to be commenced, which
arises out of or is related to any matters in which Executive was involved or
for which he was responsible during the term of his employment with the Company.


 


18.                                 Survival.


 


The
rights and obligations set forth in Sections 8-17 and 22 shall survive the
termination or expiration of this Agreement, regardless of whether Executive resigns or is involuntarily discharged.


 


19.                                 Miscellaneous.


 


19.1.                        Headings; Construction.  The headings of Sections and paragraphs
herein are included solely for convenience of reference and shall not control
the meaning or interpretation of any of the provisions of this Agreement.  This Agreement shall be construed without
regard to any presumption or other rule requiring construction hereof
against the party causing this Agreement to be drafted.


 


19.2.                        Benefit. 
Subject to Section 17, nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.


 


19.3.                        Waiver.  Any
delay by either party in asserting a right under this Agreement or any failure
by either party to assert a right under this Agreement will not constitute a
waiver by the asserting party of any right hereunder, and the asserting party
may subsequently assert any or all of its rights hereunder as if the delay or
failure to assert rights had not occurred.


 


19.4.                        Severability.  If the final determination of a court of competent
jurisdiction declares, after the expiration of the time within which judicial
review (if permitted) of such determination may be perfected, that any term of
provision hereof is invalid or unenforceable, (a) the remaining terms and
provisions hereof shall be unimpaired, and (b) the invalid or
unenforceable term or provision shall be deemed replaced by a term or provision


 


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that is valid and
enforceable and that comes closest to expressing the intention of the invalid
or unenforceable term or provision.


 


20.           Entire
Agreement;
Amendment.


 


20.1.        Entire Agreement.  Both Executive and the Company agree that
this Agreement and Exhibit A to this Agreement (Executive’s stock option agreement) constitute the
entire agreement between them with respect to the subject matter thereof.  There were no inducements or representations
leading to the execution of this Agreement except as stated in this
Agreement.  Accordingly, this Agreement
(together with Exhibit A to this Agreement) expressly supersedes any and
all prior oral and written agreements, representations and promises between the
parties relating to Executive’s employment with the Company.


 


20.2.        Amendment.  This Agreement may be amended or modified
only with the written consent of both Executive and the Company.  No oral waiver, amendment or modification
will be effective under any circumstances whatsoever.


 


21.           Notices.


 


21.1.        Any notice hereunder by either party to the other
shall be given in writing by personal delivery or certified mail, return receipt requested.  If addressed to Executive, the notice shall
be delivered or mailed to Executive at the address most recently communicated
in writing by Executive to the Company, or if addressed to the company, the notice
shall be delivered or mailed to the Company at its executive offices to the
attention of the Board of Directors of the Company with a copy to the attention of the General Counsel. 
A notice shall be deemed given, if by personal delivery, on the date of
such delivery or, if by certified mail, on the delivery date shown on the
applicable return receipt.


 


22.           Governing Law;
Disputes; Arbitration of Termination of Employment for Cause.


 


22.1.        Governing Law;
Disputes.  This Agreement will be
governed by and construed in accordance with the laws of the State of
Minnesota, as such laws are applied to agreements entered into and to be
performed entirely within Minnesota between Minnesota residents.  Except as set forth in Section 22.2
below, the undersigned each irrevocably consent to the jurisdiction of the
United States District Court for the District of Minnesota and the courts of
the State of Minnesota in any suit, action, or proceeding brought under, based on or related
to or in connection with this Agreement, and each of the undersigned agrees
that either of the aforesaid courts will be the exclusive original forum for
any such action.


 


22.2.        Arbitration of
Termination of Employment for Cause.  Any dispute arising out of or relating to
termination of Executive’s employment for Cause pursuant to Section 6 of
this Agreement, shall be discussed between the disputing parties in a good
faith effort to arrive at a mutual settlement of any such controversy.  If, notwithstanding, such dispute cannot be resolved,
such dispute shall be settled by binding arbitration.  Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.  The arbitrator shall be a retired state or
federal judge or an attorney who has practiced securities or business law or business litigation
for at least 20 years.  If the parties 


 


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cannot agree on an arbitrator
within 20 days, any party may request that the chief judge of the District
Court for Hennepin County, Minnesota, select an arbitrator.  Arbitration will be conducted pursuant to the
provisions of this Agreement, and the employment arbitration rules of the
American Arbitration Association, unless such rules are inconsistent with
the provisions of this Agreement. 
Limited civil discovery shall be permitted for the production of
documents and taking of depositions. 
Unresolved discovery disputes may be brought to the attention of the
arbitrator who may dispose of such dispute. 
The arbitrator shall have the authority to award any remedy or relief
that a court of this state could order or grant; provided, however, that punitive
or exemplary damages shall not be awarded. 
The Company shall pay the fees and expenses of the arbitrator.  Unless otherwise agreed by the parties, the
exclusive location of any arbitration proceedings shall be Hennepin County,
Minnesota.


 


23.           Code Section 409A.  Notwithstanding anything herein
to the contrary, to the maximum extent permitted by applicable law, amounts
payable to Executive pursuant to Section 7 shall be made in reliance upon
Treas. Reg. Section 1.409A-1(b)(9) (Separation Pay Plans) or Treas.
Reg. Section 1.409A-1(b)(4) (Short-Term Deferrals).  For this purpose, each payment shall be
considered a separate and distinct payment. 
However, to the extent any such payments are treated as non-qualified
deferred compensation subject to Section 409A of  the Internal Revenue Code of 1986, as amended
(the “Code”), then (i) no amount shall be payable pursuant to Section 7.4
unless Executive’s termination of employment constitutes a “separation from service”
within the meaning of Treas. Reg. Section 1.409A-1(h) and (ii) if
Executive is deemed at the time of his separation from service to be a “specified
employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then
to the extent delayed commencement of any portion of the termination benefits
to which Executive is entitled under this Agreement is required in order to
avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the
Code, such portion of Executive’s termination benefits shall not be provided to
Executive prior to the earlier of (i) the expiration of the six-month period
measured from the date of Executive’s “separation from service” with the
Company (as such term is defined in the Treasury Regulations issued under Section 409A
of the Code) or (ii) the date of Executive’s death.  Upon the earlier of such dates, all payments
deferred pursuant to this Section 23 shall be paid in a lump sum to
Executive, and any remaining payments due under the Agreement shall be paid as
otherwise provided herein.  The
determination of whether Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Code as of the time of his separation from service shall be made by the
Company in accordance with the terms of Section 409A of the Code and applicable
guidance thereunder (including without limitation Treas. Reg. Section 1.409A-1(i) and
any successor provision thereto).


 


The parties acknowledge and
agree that, to the extent applicable, this Agreement shall be interpreted in
accordance with, and the parties agree to use their best efforts to achieve
timely compliance with, Section 409A of the Code and the Department of
Treasury Regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued after the date hereof.


 


[SIGNATURES ON FOLLOWING PAGE]


 


11

















 


IN WITNESS WHEREOF, the parties have executed this Employment Agreement by their signatures below:


 


	
  Analysts
  International Corporation

  	
   

  	
  Andrew
  K. Borgstrom (“Executive”)

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  K.K. Burhardt

  	
   

  	
  By:

  	
  /s/
  A. Borgstrom

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Chair,
  Board of Directors

  	
   

  	
  Date
  signed:

  	
  12.17.09

  
	
   

  	
   

  	
   

  	
   

  
	
  Date
  signed:

  	
  12.17.09

  	
   

  	
   

  
							



 


12

















 


Exhibit A


 


INCENTIVE STOCK OPTION
AGREEMENT


 


ANALYSTS INTERNATIONAL
CORPORATION


2009 EQUITY INCENTIVE PLAN


 


THIS AGREEMENT, made effective as of this 17th day of December, 2009,
by and between Analysts International Corporation, a Minnesota corporation (the
“Company”), and Andrew K. Borgstrom (“Participant”).


 


W I T N E S S E T H:


 


WHEREAS, Participant on the date hereof is a key employee or officer of
the Company or one of its Affiliates; and


 


WHEREAS, the Company wishes to grant an incentive stock option to
Participant to purchase shares of the Company’s Common Stock pursuant to the
Company’s 2009 Equity Incentive Plan (the “Plan”); and


 


WHEREAS, the Administrator of the Plan has authorized the grant of an
incentive stock option to Participant and has determined that, as of the
effective date of this Agreement, the fair market value of the Company’s Common
Stock is $0.6814 per share;


 


NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:


 


1.             Grant
of Option.  The Company
hereby grants to Participant on the date set forth above (the “Date of Grant”),
the right and option (the “Option”) to purchase all or portions of an aggregate
of Seven Hundred Fifty Thousand (750,000) shares of Common Stock, according to
the terms and conditions hereinafter set forth and as set forth in the Plan,
and subject to adjustment pursuant to Section 14 of the Plan. The per
share price to be paid by Participant in the event of an exercise of the Option
shall be $0.6814.  This Option is
intended to be an incentive stock option within the meaning of Section 422,
or any successor provision, of the Internal Revenue Code of 1986, as amended
(the “Code”), and the regulations thereunder, to the extent permitted under
Code Section 422(d).


 


2.             Duration
and Exercisability.


 


a.             General.  The term during which this Option may be
exercised shall terminate on December 16, 2014, except as otherwise
provided in Paragraphs 2(b) through 2(d) below. This Option shall
become immediately exercisable as to One Hundred Eight-Seven Thousand Five
Hundred (187,500) shares. The remaining shares shall vest as to One Hundred
Eight-Seven Thousand Five Hundred (187,500) shares each year, on the
anniversary date of the Date of Grant, commencing on December 17, 2010,
and continuing until the shares are fully


 

















 


exercisable.
 Once the Option becomes exercisable in
accordance with the preceding schedule as to any number of the shares specified
in Paragraph 1, Participant may continue to exercise this Option with respect
to such shares under the terms and conditions of this Agreement until the
termination of the Option as provided herein. 
If Participant does not purchase upon an exercise of this Option the
full number of shares which Participant is then entitled to purchase,
Participant may purchase upon any subsequent exercise prior to this Option’s
termination such previously unpurchased shares in addition to those Participant
is otherwise entitled to purchase.


 


b.             Termination
of Employment (other than Disability or Death).  If Participant’s employment with the Company
or any Affiliate is terminated for any reason other than disability or death,
this Option shall completely terminate on the earlier of (i) the close of
business on the three-month anniversary date of such termination of employment,
and (ii) the expiration date of this Option stated in Paragraph 2(a) above.  In such period following the termination of
Participant’s employment, this Option shall be exercisable only to the extent
the Option was exercisable on the vesting date immediately preceding such
termination of employment, but had not previously been exercised.  To the extent this Option was not exercisable
upon such termination of employment, or if Participant does not exercise the
Option within the time specified in this Paragraph 2(b), all rights of
Participant under this Option shall be forfeited.


 


c.             Disability.  If Participant’s employment terminates
because of disability (as defined in Code Section 22(e), or any successor
provision), this Option shall terminate on the earlier of (i) the close of
business on the twelve-month anniversary date of such termination of
employment, and (ii) the expiration date of this Option stated in
Paragraph 2(a) above. In such period following the termination of
Participant’s employment, this Option shall be exercisable only to the extent
the Option was exercisable on the vesting date immediately preceding such
termination of employment, but had not previously been exercised.  To the extent this Option was not exercisable
upon such termination of employment, or if Participant does not exercise the
Option within the time specified in this Paragraph 2(c), all rights of
Participant under this Option shall be forfeited.


 


d.             Death.  In the event of Participant’s death, this
Option shall terminate on the earlier of (i) the close of business on the
twelve-month anniversary of the date of Participant’s death, and (ii) the
expiration date of this Option stated in Paragraph 2(a) above.  In such period following Participant’s death,
this Option may be exercised by the person or persons to whom Participant’s
rights under this Option shall have passed by Participant’s will or by the laws
of descent and distribution only to the extent the Option was exercisable on
the vesting date immediately preceding the date of Participant’s death, but had
not previously been exercised. To the extent this Option was not exercisable
upon the date of Participant’s death, or if such person or persons fail to
exercise this Option within the time specified in this Paragraph 2(d), all
rights under this Option shall be forfeited.


 


3.             Manner
of Exercise.


 


a.             General.  The Option may be exercised only by
Participant (or other proper party in the event of death or incapacity),
subject to the conditions of the Plan and subject to such other administrative rules as
the Administrator may deem advisable, by delivering within the option


 


2

















 


period
written notice of exercise to the Company at its principal office. The notice
shall state the number of shares as to which the Option is being exercised and
shall be accompanied by payment in full of the option price for all shares
designated in the notice.  The exercise
of the Option shall be deemed effective upon receipt of such notice by the Company
and upon payment that complies with the terms of the Plan and this
Agreement.  The Option may be exercised
with respect to any number or all of the shares as to which it can then be
exercised and, if partially exercised, may be so exercised as to the
unexercised shares any number of times during the option period as provided
herein.


 


b.             Form of
Payment.  Subject to
the approval of the Administrator, payment of the option price by Participant
shall be made (i) in cash, or with a personal check or certified check, (ii) by
the transfer from Participant to the Company of previously acquired shares of
Common Stock, (iii) through the withholding of shares of Common Stock from
the number of shares otherwise issuable upon the exercise of the Option (e.g., a net share settlement), (iv) through
broker-assisted cashless exercise, or (v) by a combination thereof.  For purposes of this Agreement, “previously
acquired shares of Common Stock” shall include shares of Common Stock that are
already owned by Participant at the time of exercise.


 


c.             Stock
Transfer Records.  As soon as
practicable after the effective exercise of all or any part of the Option,
Participant shall be recorded on the stock transfer books of the Company as the
owner of the shares purchased, and the Company shall deliver to Participant one
or more duly issued stock certificates evidencing such ownership.  All requisite original issue or transfer
documentary stamp taxes shall be paid by the Company.


 


4.             Miscellaneous.


 


a.             Employment or Other Relationship; Rights
as Shareholder.  This Agreement
shall not confer on Participant any right with respect to the continuance of
employment or any other relationship with the Company or any of its Affiliates,
nor will it interfere in any way with the right of the Company to terminate
such employment or relationship. 
Participant shall have no rights as a shareholder with respect to shares
subject to this Option until such shares have been issued to Participant upon
exercise of this Option.  No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property), distributions or other rights for which the
record date is prior to the date such shares are issued, except as provided in Section 14
of the Plan.


 


b.             Securities
Law Compliance.  The
exercise of all or any parts of this Option shall only be effective at such
time as counsel to the Company shall have determined that the issuance and
delivery of Common Stock pursuant to such exercise will not violate any state
or federal securities or other laws. 
Participant may be required by the Company, as a condition of the
effectiveness of any exercise of this Option, to agree in writing that all
Common Stock to be acquired pursuant to such exercise shall be held, until such
time that such Common Stock is registered and freely tradable under applicable
state and federal securities laws, for Participant’s own account without a view
to any further distribution thereof, that the certificates for such shares
shall bear an appropriate legend to that effect and that such shares will be
not transferred or disposed of except in compliance with applicable state and
federal securities laws.


 


3

















 


c.             Mergers,
Recapitalizations, Stock Splits, Etc.  Except as otherwise specifically provided in
any employment, change of control, severance or similar agreement executed by
the Participant and the Company, pursuant and subject to Section 14 of the
Plan, certain changes in the number or character of the Common Stock of the
Company (through sale, merger, consolidation, exchange, reorganization,
divestiture (including a spin-off), liquidation, recapitalization, stock split,
stock dividend or otherwise) shall result in an adjustment, reduction or
enlargement, as appropriate, in Participant’s rights with respect to any
unexercised portion of the Option (i.e., Participant shall have such “anti-dilution”
rights under the Option with respect to such events, but shall not have “preemptive”
rights).


 


d.             Shares
Reserved.  The Company
shall at all times during the option period reserve and keep available such
number of shares as will be sufficient to satisfy the requirements of this
Agreement.


 


e.             Withholding  Taxes.  To
permit the Company to comply with all applicable federal and state income tax
laws or regulations, the Company may take such action as it deems appropriate
to ensure that, if necessary, all applicable federal and state payroll, income
or other taxes are withheld from any amounts payable by the Company to
Participant.  If the Company is unable to
withhold such federal and state taxes, for whatever reason, Participant hereby
agrees to pay to the Company an amount equal to the amount the Company would
otherwise be required to withhold under federal or state law.  Subject
to such rules as the Administrator may adopt, the Administrator may, in
its sole discretion, permit Participant to satisfy such withholding tax
obligations, in whole or in part (i) by delivering shares of Common Stock,
or (ii) by electing to have the Company withhold shares of Common Stock
otherwise issuable to Participant, in either case having a Fair Market Value,
as of the date the amount of tax to be withheld is determined under applicable
tax law, equal to the minimum amount
required to be withheld for tax purposes. 
Participant’s request to deliver shares or to have shares withheld for
purposes of such withholding tax obligations shall be made on or before the
date that triggers such obligations or, if later, the date that the amount of
tax to be withheld is determined under applicable tax law.  Participant’s request shall be approved by
the Administrator and otherwise comply with such rules as the
Administrator may adopt to assure compliance with Rule 16b-3 or any
successor provision, as then in effect, of the General Rules and
Regulations under the Securities and Exchange Act of 1934, if applicable.


 


f.              Nontransferability.  During the lifetime of Participant, the
accrued Option shall be exercisable only by Participant or by the Participant’s
guardian or other legal representative, and shall not be assignable or
transferable by Participant, in whole or in part, other than by will or by the
laws of descent and distribution.


 


g.             2009
Equity Incentive Plan.  The
Option evidenced by this Agreement is granted pursuant to the Plan, a copy of
which Plan has been made available to Participant and is hereby incorporated
into this Agreement.  This Agreement is
subject to and in all respects limited and conditioned as provided in the Plan.
All defined terms of the Plan shall have the same meaning when used in this
Agreement.  The Plan governs this Option
and, in the event of any


 


4

















 


questions
as to the construction of this Agreement or in the event of a conflict between
the Plan and this Agreement, the Plan shall govern, except as the Plan
otherwise provides.


 


h.             Lockup
Period Limitation. 
Participant agrees that in the event the Company advises Participant
that it plans an underwritten public offering of its Common Stock in compliance
with the Securities Act of 1933, as amended, and that the underwriter(s) seek
to impose restrictions under which certain shareholders may not sell or
contract to sell or grant any option to buy or otherwise dispose of part or all
of their stock purchase rights of the underlying Common Stock, Participant
hereby agrees that for a period not to exceed 180 days from the prospectus,
Participant will not sell or contract to sell or grant an option to buy or
otherwise dispose of this Option or any of the underlying shares of Common
Stock without the prior written consent of the underwriter(s) or its
representative(s).


 


i.              Blue
Sky Limitation. Notwithstanding anything in
this Agreement to the contrary, in the event the Company makes any public
offering of its securities and it is determined that it is necessary to reduce
the number of issued but unexercised stock purchase rights so as to comply with
any state securities or Blue Sky law limitations with respect thereto, and such
determination is affirmed by the Board of Directors, unless the Board of
Directors determines otherwise, (i) the exercisability of this Option and
the date on which this Option must be exercised shall be accelerated, provided
that the Company agrees to give Participant 15 days’ prior written notice of
such acceleration, and (ii) any portion of this Option or any other option
granted to Participant pursuant to the Plan which is not exercised prior to or
contemporaneously with such public offering shall be canceled.  Notice shall be deemed given when delivered
personally or when deposited in the United States mail, first class postage
prepaid and addressed to Participant at the address of Participant on file with
the Company.


 


j.              Accounting
Compliance.  Participant
agrees that, if a merger, reorganization, liquidation or other “transaction” as
defined in Section 14 of the Plan occurs and Participant is an “affiliate”
of the Company or any Affiliate (as defined in applicable legal and accounting
principles) at the time of such transaction, Participant will comply with all
requirements of Rule 145 of the Securities Act of 1933, as amended, and
the requirements of such other legal or accounting principles, and will execute
any documents necessary to ensure such compliance.


 


k.             Stock
Legend.  The
Administrator may require that the certificates for any shares of Common Stock
purchased by Participant (or, in the case of death, Participant’s successors)
shall bear an appropriate legend to reflect the restrictions of Paragraph 4(b) and
Paragraphs 4(g) through 4(i) of this Agreement; provided, however,
that failure to so endorse any of such certificates shall not render invalid or
inapplicable Paragraph 4(b) or Paragraphs 4(g) through 4(i).


 


l.              Scope
of Agreement.  This
Agreement shall bind and inure to the benefit of the Company and its successors
and assigns and Participant and any successor or successors of Participant
permitted by Paragraph 2 or Paragraph 4(f) above.


 


5

















 


m.            Arbitration.  Any
dispute arising out of or relating to this Agreement or the alleged breach of
it, or the making of this Agreement, including claims of fraud in the
inducement, shall be discussed between the disputing parties in a good faith
effort to arrive at a mutual settlement of any such controversy.  If, notwithstanding, such dispute cannot be
resolved, such dispute shall be settled by binding arbitration.  Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.  The arbitrator shall be a retired state or
federal judge or an attorney who has practiced securities or business
litigation for at least 10 years.  If the
parties cannot agree on an arbitrator within 20 days, any party may request
that the chief judge of the District Court for Hennepin County, Minnesota,
select an arbitrator.  Arbitration will
be conducted pursuant to the provisions of this Agreement, and the commercial
arbitration rules of the American Arbitration Association, unless such rules are
inconsistent with the provisions of this Agreement.  Limited civil discovery shall be permitted
for the production of documents and taking of depositions.  Unresolved discovery disputes may be brought
to the attention of the arbitrator who may dispose of such dispute.  The arbitrator shall have the authority to
award any remedy or relief that a court of this state could order or grant;
provided, however, that punitive or exemplary damages shall not be
awarded.  The arbitrator may award to the
prevailing party, if any, as determined by the arbitrator, all of its costs and
fees, including the arbitrator’s fees, administrative fees, travel expenses,
out-of-pocket expenses and reasonable attorneys’ fees.  Unless otherwise agreed by the parties, the
place of any arbitration proceedings shall be Hennepin County, Minnesota.


 


5.             Change
of Control. 
Notwithstanding anything in the Plan or this Agreement to the contrary,
this Option shall become fully vested and exercisable upon a “Change of Control”
as defined in the Plan.


 


ACCORDINGLY, the parties hereto have caused this Agreement to be
executed on the day and year first above written.


 


	
   

  	
  ANALYSTS
  INTERNATIONAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Participant

  



 


6